Tuesday

July 7 marks one year since Illinois’ historic 736-day budget impasse ended with the passage of a record-setting income tax hike.

So what has taxpayers’ $5 billion cash infusion done for the state?

Put it this way: Illinoisans, you aren’t getting much bang for your tax-hike bucks.

Illinois is still running massive budget deficits, politicians have done nothing to solve the state’s long-term fiscal problems, and worst of all the tax hike damaged Illinois’ jobs and economic growth.

Happy anniversary, indeed.

In 2017, the permanent 32 percent personal income tax hike and 33 percent corporate income tax hike — passed over Gov. Bruce Rauner’s veto — were heralded as solutions to balancing the budget, paying off debt and getting Illinois’ credit rating back on steady ground. Unsurprisingly, the tax hike hasn’t accomplished any of that.

It didn’t even balance last year’s budget, which is expected to run $590 million in the red, according to the Governor's Office of Management and Budget.

And lawmakers’ so-called “compromise budget” for fiscal year 2019 relies on the $5 billion tax hike and a number of accounting gimmicks. All three major credit ratings agencies are in agreement that the budget isn’t structurally balanced and does nothing to solve the state’s long-term fiscal challenges.

Even worse, the recent budget fails to do anything to structurally reform Illinois’ worst-in-nation pension crisis or massive stack of unpaid bills, which now sits at nearly $7 billion.

And while Illinois lawmakers continue to pursue more tax hikes as the cure-all to “save the state,” all six of Illinois’ neighboring states have lowered their income taxes since 2011. As a result, our state economy continues to lag behind, ranking 42nd in the nation in 2017, behind every neighboring state.

Looking back over the last year, it’s clear that the latest tax hike only made our economic and jobs problems worse.

Illinois saw just 0.84 percent growth in total non-farm payrolls from April 2017 to April 2018, the most recent period of non-preliminary data available from the Bureau of Labor Statistics. The national average for that same period is almost double, at 1.57 percent. It’s no coincidence that other states are better able to attract companies and grow jobs.

The status quo is unacceptable. Springfield’s lack of fiscal responsibility has continuously run Illinois into the ground.

At this point it should be obvious to everyone that tax increases will never solve Illinois’ problems.

There’s a clear reason why.

Illinois does not have a revenue problem; it has a spending problem. State spending grew 25 percent faster than residents’ personal income over a recent 10-year period.

There’s a common sense, bipartisan-backed solution to solve this problem: Illinois should pass a constitutional spending cap that would rein in the growth of government spending. This spring, the Illinois Policy Institute introduced a spending cap amendment that would have tied annual increases in state spending to the long run average of growth in the state’s economy. In other words, it tied lawmakers’ ability to spend to taxpayers’ ability to pay. Democrats and Republicans alike rallied behind the idea.

Taxpayers need lawmakers to build on that momentum and voluntarily adopt a spending cap while we await a change to the constitution. After that, politicians have to buckle down and get to work on reforms to the pension crisis, which promises to eat the state alive if lawmakers continue to do nothing.

Looking ahead, there’s a good chance whoever is elected governor this November will face a mid-year budget hole in January. The definition of insanity is doing the same thing over and over again and expecting different results.

On the anniversary of the failed 2017 tax hike, one thing is clear: It would be insane to hike income taxes again in Illinois.

Adam Schuster is the director of budget and tax research at the Illinois Policy Institute, a Springfield- and Chicago-based think tank that promotes smaller government and free-market principles.

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